Press release number: IFAD 04/02

Rome, 15 January 2002 - A USD 42.30 million project in the United Republic of Tanzania - 'The Agricultural Marketing Systems Development Programme' will receive a USD 16.34 million loan from the International Fund for Agricultural Development (IFAD). A loan agreement was signed today at the Fund's Headquarters by His Excellency, Dr. Ricky Costa Mahalu, Ambassador of Tanzania to Italy and Mr. Klemens van de Sand, Assistant President of the Fund.

The programme will initially operate in two zones of the country: the Northern and Southern Highlands Marketing Zones. Both of these have a predominance of poorer rural households, with an average per capita gross domestic product that is below the national average. Their potential for improvement in small farmer incomes and production however, is enormous if greater market efficiency and effectiveness is achieved. Given the multidimensional and holistic nature of the programme with emphasis given to rationalization of overall marketing policies and improvements of related infrastructures, it is expected that all rural market participants will benefit.

Factors that have led to poverty for 4.4 million smallholder producers, traders and processors, include: lack of a conducive marketing policy environment, market information and communications systems; inadequate market infrastructures, economies of scale and vertical integration, and shortage of investment and working capital. All these factors have combined to heavily depress the value of output and income received by small farmers.

The overall goal of the Agricultural Marketing Systems Development Programme is to increase the income and food-security situation of the rural poor in the Northern and Southern Marketing Zones. The programme's objectives are to improve the structure, conduct and performance of the agricultural marketing and pricing systems in the country in order to raise smallholder incomes and diversify their production in an active and equitable partnership with the private sector. Specifically, this is to be achieved by: improving the relevant marketing policies, empowering the target groups by strengthening them financially and organizationally and enabling the target groups to own and operate the system and become active partners in all decision making processes. The cofinanciers of this programme are the African Development Bank, and the Government of Ireland.

With this programme, IFAD will have financed 9 projects in the United Republic of Tanzania, for a total loan amount of about USD 119.28 million.

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IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.